The latter two invested $13 million in the company last year — so Auxmoney’s total funding to date stands at around $29 million. In Germany it competes with the likes of Smava. While it shares an investor (Union Square Ventures) with the U.S. focused Lending Club.

Commenting on the funding round in a statement, Charles Moldow, General Partner at Foundation Capital, said: “auxmoney is perfectly positioned to capture a significant share of the German banking and investment market over the next few years. The auxmoney model and team proved, in a challenging environment, the capability to deliver tremendous value to both borrowers and investors.”

Auxmoney co-founder Raffael Johnen told TechCrunch that it plans to use the new funding to ramp up its operations by expanding its headcount (currently at around 60 staff) — and investing in the product and its technology. International expansion is also “on the agenda”, he said.

The company assesses the risk of borrowers by using its own proprietary algorithms which parse a range of signals, including some of the traditional metrics that banks consider when deciding whether to lend money, such as credit history, but also by looking at a multitude of more subtle signals (which Johnen calls its “secret sauce”) — such as how potential borrowers behave on its website and elsewhere online.

“We not only look at traditional data that banks look at, which is basically credit bureau data… We look much beyond that,” said Johnen. “We’re very proud of our scoring and pricing algorithms.”

Since this is the startup’s secret sauce he’s wary of being too specific about how it works, but one example of an input it could factor in to a borrowing decision, along with a multitude of other signals, is whether a potential borrower takes the time to read an FAQ section on the website, or how long they spend looking over the detail of repayment information. So, in other words, whether they are really digesting the impact on their finances of the loan — or not.

Auxmoney’s risk management system sees around 80% of potential borrowers excluded from its platform, according to Johnen. The fifth that is allowed to enter is then categorised into five groups — with a different interest rate applied to each group, depending on where the borrower sits on the risk spectrum.

Unlike e-loan company Wonga, Johnen says Auxmoney is not in the business of lending to high risk individuals. The worst borrower on its platform “is still a good quality borrower”, is how he puts it. Auxmoney is also not lending any of its own money — but is purely a marketplace that connects people who want to borrow money with people or institutions who want to lend money.

“On the lenders side, we are able to offer very attractive returns to private people. They can make — after everything, after taking defaults into consideration — around 6% net and that’s very attractive proposition. If you put your money in a savings account in a bank you might get 1%, you might get 2% but here you get a multiple of that. So that’s why we’re seeing a big inflow,” said Johnen.

Business-related loans are also helping to drive its business, with individuals applying for private loans on Auxmoney to help kickstart a business idea — a trend that Johnen says is being fueled by banks’ reluctance to lend to entrepreneurs.

The platform is also increasingly attracting institutional investors wanting to deploy large amounts of capital on the platform, by making multiple small loans to individuals, according to Johnen.

These “big ticket” investors have inevitably taken some time for Auxmoney, which was founded back in 2007, to on-board. “They need critical size and it took us time to get to the borrower demand that we have today,” he said.

Auxmoney has facilitated almost 20,000 loans to date, worth €100 million in total, more than half of which it says were issued in the past 12 months.

To further spur the lender side, Johnen said Auxmoney will be allowing international investors (i.e. those outside of Germany) to invest money via the platform “soon”. “Germany has been a country that’s very resilient to [global economic] downturns… So Germany’s a very robust economy and our international lenders love that,” he added.

It’s also eyeing up international expansion more generally, to open its platform to borrowers outside Germany for the first time. In Germany, Auxmoney has built up a registered user-base of around 600,000 thus far.

As it looks to expand outside its home turf, Johnen said “the focus will be on Europe” — although he declined to specify which markets Auxmoney is specifically planning to add.

Discussing the future of the crowdlending market, Johnen said he envisages it being dominated by relatively few strong global players, despite regional considerations for moneylending businesses such as regional regulations and legislation. Ultimately, he argues, the synergies offered by technology process and risk management learnings will drive consolidation, and a few big winners emerging.

“Although almost all of the players have focused on their home countries for the time being that will change, in my opinion. You will start — the leading platforms at least — to grow internationally, reach out and acquire other companies to accelerate,” he added.

In terms of diversifying beyond p2p lending — say, into payments as Wonga is — that’s not something that’s on the cards for Auxmoney.

“We remain focused on p2p lending. In Germany alone, unsecured consumer loans — which is then again only a fraction of what is possible within the German p2p lending market — the opportunity is huge. And even if we want to stay in Germany, expanding our focus, like doing SME loans, for example, mortgage loans etc, it also makes a lot of sense,” he said.

“And then we have international expansion on top of it, so the sky’s the limit. So there’s no need to go into payments or something financially related. So we are focused, dedicated. That’s what we know, that’s what we do well, and that’s where we’re going to stay.”